East Bay braces for exodus before new pension-spiking ban takes effect for government workers

Dozens of government workers in the East Bay are rushing to retire before Friday to avoid new rules that ban the practice of spiking pensions with unused leave time.

At least 85 Contra Costa County workers, including firefighters, public works officials and the county's chief planner, plan to jump ship in the coming days. Alameda County executives have not revealed how many they expect to go, but Sheriff Greg Ahern said four lieutenants, two sergeants and six deputies have already left his department and more will come forward soon.

"It has a huge impact for us," Ahern said. "They all felt they had more time to give the agency. This will impact us in overtime and replacing their institutional knowledge."

All are fleeing new rules imposed by Assembly Bill 197, a 2012 state law that ends the common practice of fattening pensions with unused vacation and other leave time.

For years, the Contra Costa County Employees' Retirement Association and the Alameda County Employees' Retirement Association allowed retiring workers to boost their annual pensions with "terminal pay" -- a final cashing out of unused time.

The formula used to calculate how much retirees get in their public pension checks is based on the salaries workers make before they retire, but the final one-time payout inflated pension income by as much as 15 percent in Contra Costa County and a smaller amount in Alameda County.

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AB 197 banned that practice, but unions sued to stop it from being implemented. The unions argued that their workers had been led to believe they would get the higher pensions and that the new rules violated their contractual, vested rights.

Contra Costa Superior Court Judge David Flinn ruled in May that pension-spiking was always illegal and that pension boards must follow the new state law regardless of what the workers were told. The ruling affects workers whose retirements are managed by county-level boards in Alameda, Contra Costa and Merced counties, but the new policy has been delayed as the unions appeal.

On Monday, however, a state appeals court denied an attempt to block Flinn's ruling from being enforced as the appeals case proceeds. That means Thursday is the last day of work for anyone who wants to retire under the old system.

East Bay agencies are bracing themselves, though neither county expects a devastating loss of workers.

"When the new pension laws went into effect, back at the end of 2012, it was anticipated we would have a mass exodus," said Donna Ziegler, Alameda County's top lawyer. "It proved to be not as large a number as would be anticipated at the time."

Some who wanted to get out before the ban have retired over the past year, lessening the sudden impact, Ziegler said. How many will leave next week is unknown, she said. Alameda County pension board executive Vincent Brown could not be reached for comment.

In Contra Costa County, 85 of its workers informed managers before the Fourth of July holiday that they planned to retire, and more are expected to announce soon, said County Administrator David Twa.

"It's manageable. We have 9,500 employees. The question is, of course, which ones retire," Twa said.

One hard-hit department is Public Works, where many of the people who negotiate leases are retiring. Also expected to leave is Catherine Kutsuris, who directs Contra Costa County's Department of Conservation and Development. Kutsuris did not return multiple requests for comment.

Alameda County's sheriff said he is losing a top explosives expert with "decades of experience in that field."

"He's kind of broken up about leaving," Ahern said. "By leaving he would make the same amount of money retired as he would working."